New York
Many Places Still Have Not Recovered from the Pandemic Recession
More than four years have passed since the onset of the pandemic, which resulted in one of the sharpest and deepest economic downturns in U.S. history. While the nation as a whole has recovered the jobs that were lost during the pandemic recession, many places have not. Indeed, job shortfalls remain in more than a quarter of the country’s metro areas, including many in the New York-Northern New Jersey region. In fact, while employment is well above pre-pandemic levels in Northern New Jersey, jobs have only recently recovered in and around New York City, and most of upstate New York—like much of the Rust Belt—still has not fully recovered and has some of the largest job shortfalls in the country.
In this post, we examine the uneven geographic recovery from the pandemic recession, including why some places are finding it so difficult to recover. Many of the places that have not regained the jobs lost were hit particularly hard by the pandemic, leaving a deeper hole to dig out of. Further, these places tended to be slow-growing local economies leading up to the pandemic, leaving less momentum for a full recovery, and they face ongoing struggles finding the workers they need to grow. Indeed, with such persistent headwinds, many of these places are likely to continue to struggle to fully recover from the pandemic recession.
Most Places Have More Than Fully Recovered, But Many Have Not
Employment fell nearly 15 percent in the United States between February 2020 and April 2020—a shockingly large decline in such a short period of time. The country had dug itself out of this massive hole by the summer of 2022, recovering all of the jobs that were lost, and employment is now nearly 4 percent above pre-pandemic levels. As the map below shows, however, the recovery has been uneven and remains incomplete in many places. Indeed, while most metro areas have recouped the jobs that were lost during the recession (shown as blue dots), more than 25 percent still have not (shown as red dots). Most of these areas are concentrated in the Rust Belt along the Great Lakes, though clusters are present in parts of the South—Louisiana in particular—as well as in California, Oregon, and Hawaii. In fact, employment is still more than 5 percent below pre-pandemic levels in New Orleans, and more than 3 percent below in Honolulu and San Francisco. Likewise, sizable job shortfalls remain in Cleveland, Detroit, and Pittsburgh. At the other end of the spectrum, employment in fast-growing parts of the country such as Austin, Boise, Phoenix, Raleigh, Charleston, and Sarasota is now more than 10 percent above pre-pandemic levels. (Download the full set of metro-area data and rankings).
An Uneven Geographic Recovery from the Pandemic Recession
Sources: U.S. Bureau of Labor Statistics; Moody’s Economy.com.
Much of The New York-Northern New Jersey Region Is Still Way Behind
The New York-Northern New Jersey region was hit especially hard by the pandemic, and has been slow to recover. The chart below shows the change in employment from February 2020 to March 2024 for local areas in the region compared to the nation as a whole.
Large Job Shortfalls Remain in Much of the N.Y.-Northern N.J. Region
Sources: U.S. Bureau of Labor Statistics; Moody’s Economy.com.
Employment is well above pre-pandemic levels in Northern New Jersey, though generally to a lesser extent than nationally, and is firmly above pre-pandemic levels in Fairfield, Conn. Though it took one-and-a-half years longer than for the nation as a whole, New York City has now recovered the jobs that were lost during the pandemic recession, but only just so, leaving it well behind the nation. Notably, the jobs gained in New York City during the recovery have not been the same as the jobs that were lost. Indeed, much of the City’s job growth has been in the healthcare sector, which is up almost 14 percent compared to pre-pandemic levels. And while there has been growth in high-paying sectors such as finance and business services during the recovery, lower-paying sectors such as retail, leisure & hospitality, and personal services that depend on foot traffic from office workers and visitors continue to lag.
While Long Island has just recently fully recovered to pre-pandemic employment levels, job shortfalls remain in much of the rest of New York State, including Kingston and Poughkeepsie as well as nearly every metro area in upstate New York, where some of the largest job shortfalls in the country remain. Indeed, Elmira’s employment level is still 5 percent below its pre-pandemic benchmark, ranking as the eighth-largest job deficit of all metro areas in the country. Utica, Glens Falls, Ithaca, and Poughkeepsie all have job deficits ranging between 2.6 and 3.1 percent, ranking among the twenty-five largest shortfalls in the nation. Focusing on upstate New York’s largest metros, Syracuse has now only just recovered the jobs that were lost, and Albany, Buffalo, and Rochester all have job deficits around 0.6 to 0.7 percent.
Why Are Some Places Finding It So Hard to Recover?
The metro areas that are lagging in the jobs recovery share some common features. First, many of them were hit particularly hard during the initial shock, leaving a bigger hole to dig out of. On average, the places that have not yet recovered experienced an employment decline of 16.1 percent during the pandemic recession compared to a 13.4 percent decline in the places that have recovered. While industry composition certainly played a role in the depth of the decline—in particular, local economies reliant on tourism suffered large losses—declines were quite steep in places where the pandemic first took hold. Specifically, clusters of job deficits persist in New York, California, and Michigan, all of which emerged as coronavirus hot spots and had outsized job declines early in the pandemic. Indeed, initial job losses in the New York-Northern New Jersey region averaged almost 19 percent, and parts of California and Michigan saw initial job losses well above 20 percent.
In addition, many of the places that have not recovered were slow-growth economies heading into the pandemic, leaving less momentum to grow and recover coming out of it. Indeed, the metro areas with job deficits saw average annual job growth of just 0.5 percent in the five years leading up to the pandemic, compared to 1.5 percent, on average, for those that have recovered. Over the past year, slower job growth in the areas that have not yet recovered has resumed.
Further, many places that have not recovered just don’t have the workers to allow their local economies to grow. With persistent worker shortages across the country since the pandemic, labor has often been hard to find, and that’s been especially true in places that still have job deficits, as shown in the chart below. Here we plot pre-pandemic job gains/deficits for local areas against the change in that area’s labor force since the pandemic hit. While remote work has decoupled where people live and work to some extent, the vast majority of workers still live in commuting distance to their employers. Indeed, the clear upward-sloping pattern shows the close connection between job growth and the availability of workers both across the country and within the region.
Worker Availability Contributing to Persistent Job Shortfalls
Sources: U.S. Bureau of Labor Statistics; Moody’s Economy.com.
Local areas shown in the upper right quadrant, including those in Northern New Jersey, have seen growth in their local labor forces, and employers are more able to find the workers they need. As a result, such places are seeing employment climb well above pre-pandemic levels. At the other end of the spectrum, areas in the lower left quadrant have seen their labor forces shrink and have job deficits. Parts of upstate New York such as Binghamton, Elmira, and Utica saw labor force declines, which were in fact already occurring before the pandemic hit, in part due to population aging and people leaving the area. Clearly, more people willing and able to work will be required to achieve a full recovery in this part of the region, but with ongoing long-term labor force decline, these places and others like them are likely to continue to struggle to gain back the jobs that were lost during the pandemic recession. New York City has been able to gain back the jobs that were lost despite a declining local labor force, largely because it can draw workers from a broader surrounding geographic area.
The New Normal Is the Old Normal
Four years after the pandemic hit, historical growth patterns have generally resumed throughout the country after a period of rapid recovery. The places that were growing more strongly before the pandemic have generally recovered and are growing more strongly today, while many places that lagged are still struggling to recover. Indeed, more than a quarter of the country has not gained back the jobs that were lost during the pandemic recession, including most of upstate New York. Some places in upstate New York were hit by a “triple whammy” of slow growth leading up to the pandemic that has now resumed, a deeper hole when the pandemic hit, and a declining labor force. As such, upstate New York, and many places like it, may well continue to struggle to reach employment levels seen before the pandemic.
Jaison R. Abel is the head of Urban and Regional Studies in the Federal Reserve Bank of New York’s Research and Statistics Group.
Richard Deitz is an economic research advisor in Urban and Regional Studies in the Federal Reserve Bank of New York’s Research and Statistics Group.
Jonathan Hastings is a research associate in Urban and Regional Studies in the Federal Reserve Bank of New York’s Research and Statistics Group.
Joelle Scally is a regional economic principal in the Federal Reserve Bank of New York’s Research and Statistics Group.
How to cite this post:
Jaison R. Abel, Richard Deitz, Jonathan Hastings, and Joelle Scally, “Many Places Still Have Not Recovered from the Pandemic Recession,” Federal Reserve Bank of New York Liberty Street Economics, May 7, 2024, https://libertystreeteconomics.newyorkfed.org/2024/05/many-places-still-....
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The Region Is Struggling to Recover from the Pandemic Recession
Disclaimer
The views expressed in this post are those of the author(s) and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author(s).
Skateboarding’s Latest Trick: Reviving Cities
Rosa Chang and her husband and son live on the Manhattan side of the Brooklyn Bridge, in an extremely densely-populated urban area — roughly 47,000 people living within a half-mile radius — sandwiched between downtown Manhattan and the Lower East Side.
In 2020, when her son was four and the pandemic was in full swing, Chang grew frustrated that the urban design of their immediate neighborhood was dividing people, not bringing them together.
“There were all of these separating walls in our community,” Chang says. “There was not enough public space. Our children were playing between parked cars.”
Go Skate Day was held at the brand-new Brooklyn Banks on June 21, 2023. Credit: Lanna Apisukh / The Skatepark Project
She was well aware of a huge, nine-acre plot of land under the bridge that had been fenced off as a construction site and parking lot for more than 10 years, so she started raising the question at community meetings and around the neighborhood: What if we could use that space?
Chang reached out to two Pace University students who had started a Change.org petition to save the Brooklyn Banks. They introduced her to local skateboarder and skateboarding advocate Steve Rodriguez, who took her for a site walk and explained the space’s history. During the ’80s and ’90s, this plot of land had been home to the Brooklyn Banks, an iconic skate spot with rolling, banked surfaces and stairs. But over time, the area became associated with homelessness and drug use, and eventually found itself dormant behind those fences.
The post Skateboarding’s Latest Trick: Reviving Cities appeared first on Reasons to be Cheerful.
Out of the Fog
We had told the man he would have a warm place to stay the night, and had emphasized the city’s right to shelter. Every five minutes or so my teammate called to see whether the transport was coming, and soon fifteen minutes passed, and then twenty, then thirty, then forty.
Businesses See Inflationary Pressures Moderating
Shortly after the recovery from the pandemic recession began, the U.S. economy entered a period of high inflation as surging demand, severe supply disruptions, and worker shortages combined to create large imbalances and inflationary pressures in the economy. More recently, however, inflationary pressures have been moderating. Indeed, the inflation rate as measured by the consumer price index (CPI) has come down from its recent peak of 9.1 percent in the summer of 2022 to 3.1 percent at the start of 2024. Have inflationary pressures also moderated for local businesses in the New York–Northern New Jersey region? The New York Fed’s February business surveys asked firms about increases in their costs and prices. Results indicate that the pace of increase in costs, wages, and prices have all slowed considerably over the past year. Moreover, firms in the region expect cost and price increases, as well as the overall inflation rate, to moderate further in the year ahead.
Cost, Wage, and Price Increases Have All Slowed Considerably
While inflation remains higher than ideal, much progress has been made. CPI inflation has fallen 6 percentage points since June 2022, and inflation as measured by the producer price index has come down more than ten percentage points from its peak. Supplementary questions in the February Empire State Manufacturing Survey and Business Leaders Survey focused on recent and expected changes in firms’ costs, wages, and selling prices. Results reveal that regional firms are seeing the pace of increase in their costs and prices slowing, consistent with patterns in overall inflation.
Indeed, as the chart below shows, while firms reported an average cost increase of 11 to 13 percent for 2022, such increases fell to 5 to 6 percent over the past year. Wage increases in 2022 were about 5.5 percent for service firms and 6.4 percent for manufacturers, and slowed to 4.3 percent and 5.3 percent, respectively, over the past twelve months. A similar pattern was observed for selling price increases, which fell from an average of 7.3 percent among service firms and 9.5 percent among manufacturers in 2022 to an average of 5.3 percent and 3.2 percent, respectively, this past year. Firms expect all three measures to moderate further over the next twelve months: for both types of firms, cost increases are expected to slow to around 3.6 percent, wage increases are expected to slow to 3.8 percent, and selling price increases expected to fall to around 3 percent.
Firms See Inflationary Pressures Moderating
Service Firms
Percent
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Manufacturing Firms
Percent
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Source: New York Fed February 2024 Supplemental Survey.
Inflation Expectations Are Also Moderating
Firms were also asked about their expectations for the overall inflation rate in the economy over the next year, a question which was also posed in surveys conducted in May and December of 2022. As the chart below shows, firms’ median year-ahead inflation expectations have come down noticeably. In May 2022, when inflationary pressures were near their peak, firms’ year-ahead inflation expectations, as measured by the CPI, were above 6 percent, though longer-run inflation expectations remained anchored. By the end of 2022, year-ahead inflation expectations had already come down slightly. In our most recent survey, after more than a year of moderating inflationary pressures, the overall inflation rate is now expected to be around 3 percent over the next year, the same as what consumers are expecting according to the New York Fed’s latest Survey of Consumer Expectations.
Firms’ Inflation Expectations Continue to Moderate
Percent
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Source: New York Fed February 2024 Supplemental Survey.
Note: Bar charts plot median year-ahead inflation expectations.
Final Thoughts
All in all, our February business surveys point to ongoing moderation in inflationary pressures. This is welcome news: though inflation remains elevated, much progress has been made over the past year and more progress is expected in the year ahead. Still, this is an issue we will be tracking closely. Visit our Regional Economy website to stay up to date on economic conditions in the region.
Jaison R. Abel is the head of Urban and Regional Studies in the Federal Reserve Bank of New York’s Research and Statistics Group.
Richard Deitz is an economic research advisor in Urban and Regional Studies in the Federal Reserve Bank of New York’s Research and Statistics Group.
How to cite this post:
Jaison R. Abel and Richard Deitz, “Businesses See Inflationary Pressures Moderating,” Federal Reserve Bank of New York Liberty Street Economics, February 21, 2024, https://libertystreeteconomics.newyorkfed.org/2024/02/businesses-see-inf....
Supplemental Survey Report (February 2024)
How Much Did Supply Constraints Boost U.S. Inflation?
Do Businesses in the Region Expect High Inflation to Persist?
Severe Supply Disruptions Are Impeding Business Activity in the Region
Disclaimer
The views expressed in this post are those of the author(s) and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author(s).
The People on Buses and Trains
And I don’t know how you people think the train can move if someone is wedged half inside and half outside of it, how I’m supposed to lose my job, how I’m supposed to kill you because you wedged yourself in like that—because you decided, even if you didn’t say it, to say ‘I’m number one, and everyone else on this train is a zero’ and ‘I get to hold people up because I can’t wait another five minutes,’ or ‘Everybody has to wait for me, everybody has to be late to their job, their doctor’s appointment, their date, their inspection, their life—for me,’ just counting on us to say, OK we’ll wait, because I can’t kill you, with your body stuck halfway in the train, Mr. or Mrs. Important, stuck half in outside the door, one leg in, one leg out, one arm in, one arm out, half a woman, half a man, a half-woman half-man, cut in half.
Bridge and Tunnel Crowd
For a few hours on the morning of January 8, Gaza was everybody’s problem.
The More of Us There Are, The More of Us There Are
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